Stocks hold close to record levels

Feb. 14, 2013
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Traders work on the floor of the New York Stock Exchange. / Richard Drew, AP

by Beth Belton, USA TODAY

by Beth Belton, USA TODAY

Stock indexes traded mixed Wednesday even as the Dow Jones industrial average falls back a bit in its march toward a record high close.

In stock trading, the Dow declined 35.79 points to 13,982.91. The broader Standard & Poor's 500 index dipped 0.90 point to 1,520.33. The tech-laden Nasdaq composite index rose 10 point to 3,196.88. Gains of the tech-heavy Nasdaq were driven by a surge in Groupon shares after Wall Street analysts upgraded the stock of the online couponer to a "buy."

Althougn it dropped back below 14,000, the Dow has gained 6.7% this year and is trading within 1% of its record close of 14,164 set in October 2007.

"Sometimes the market needs to take a break and consolidate the gains," said Quincy Krosby, a markets strategist for Prudential Financial. "There's a certain respect attributed to crossing certain historical levels."

Investors sent the stocks of General Electric (GE) and Comcast (CMCSA) higher after GE agreed Tuesday to sell its stake in NBCUniversal to Comcast for $16.7 billion. GE said it would use up to $10 billion of the money to buy back its own stock. GE rose 81 cents to $23.39. Comcast advanced $1.15 to $40.12.

McDonald's (MCD) had the biggest loss in the Dow, giving up $1.10 to $94.00. Caterpillar (CAT) was close behind with a decline of 84 cents to $96.38. Eighteen stocks in the 30-member index fell.

Trading has been relatively quiet in recent days following a strong opening to the year. The Dow logged its best January in almost two decades after lawmakers reached a last-minute deal to avoid the "fiscal cliff" of sweeping tax increases and spending cuts. Investors are also becoming more optimistic that the housing market is recovering and that hiring is picking up.

"We're cautiously optimistic on stocks," said Colleen Supran, principal at Bingham, Osborn & Scarborough. "There is some indication that we could be continuing on this slow growth trajectory."

Supran said investors should still be prepared for volatility in the stock market and not assume that the gains from January and so far in February will set the pattern for the rest of the year.

Strengthening the economy and creating jobs were key topics in President Barack Obama's State of the Union address late Tuesday, the first since his re-election. Although the economy is healthier than it was four years ago, growth remains slow and unemployment high.

Obama announced that the U.S. will begin talks with the European Union on a trans-Atlantic trade agreement. He also called for increased spending to fix roads and bridges and the first increase in the minimum wage in six years. The president also challenged deeply divided lawmakers to find compromises to avoid massive, automatic spending cuts that are scheduled to take place March 1.

The government reported that Americans' spending at retail businesses and restaurants slowed last month after higher taxes cut their paychecks. Retail sales growth slowed to 0.1 percent in January, from a 0.5 percent increase in December.

As stocks have advanced, bond prices have slumped.

The yield of the 10-year U.S. Treasury bond was above 2% as it has been for most days in February. In commodities trading, gold prices were down 0.4% to $1,642. And crude oil prices were flat at $97.10 a barrel on oil delivery contract trading on the New York Mercantile Exchange.

In currency trading, the euro was flat against the dollar at 1.3449, while the dollar was up 0.3% against the Japanese yen, which was trading at 93.46.

Japan's benchmark Nikkei 225 index tumbled as the yen strengthened against the dollar following a pledge by finance ministers from the world's major advanced economies to refrain from intentionally weakening their currencies. The Nikkei 225 closed down 1% to 11,251.41.